Small step forward for CCS in the US

In an attempt to kick along the roll-out ofCCS in the United States, the Environmental Protection Agency (EPA) in recent days has proposed a new rule exempting carbon dioxide streams from hazardous waste regulations under certain conditions. The move has been recognised by CCS proponents as a helpful step.

The proposed rule would exclude carbon dioxide streams from regulation if they are injected for geologic sequestration in wells that meet other requirements under the Safe Drinking Water Act.

The EPA said it was proposing this exclusion as part of its effort to reduce barriers to the use of CCS technologies.

But while positive, those trying to build CCS projects keep pointing to the age old issue of a price on carbon as the main impediment to the deployment of projects.

American Electric Power’s Pat Hemlepp was quoted in response to the proposal: "Really nothing out of EPA at this time will remove the state regulatory barriers to cost recovery. That's our biggest issue".

Pat cited the need for state regulators to allow utilities to pass through the costs of CCS to ratepayers. "There is not a federal requirement in place that would make it necessary for us to remove greenhouse gases from the emissions stream from a coal-fired power plant. Without firm rules in place, you can't convince the state regulators to let you recover the cost," he said.

Last month the utility cited this as the reason why it was halting its $668 million CCS retrofit to its Mountaineer power station in Western Virginia.

So the challenge remains - providing a financial incentive for businesses to take the carbon dioxide out of their power stations.

And this continues to be a tough problem to overcome. The US domestic debate on climate change has stalled - at best - so the prospect of a price on carbon any time soon looks bleak.

There were some positive signs last week however when Senate Majority Leader Harry Reid promised quick action on energy legislation when the chamber returns in September from a four-week recess.

The question is: what will this action look like? A price on carbon would be ideal but even the most optimistic recognise that this will be still be some time off.

The question then for CCS proponents is whether legislation will provide anything that could support the deployment of CCS.

While not out of the question, and there have certainly been proposals in the past that would have helped considerably, the current focus of the US energy debate doesn’t bode well for CCS. The debate is heavily weighted towards the issues of domestic energy security and keeping costs down for consumers.

With the deficit agreement leading to huge cuts in government spending, anything like the $10 billion that was recently proposed for CCS research and development now looks like it came from a different world.

Unfortunately, applying CCS to existing or new power stations doesn’t address the energy security issue. While it certainly makes local energy less greenhouse polluting, unless political leaders agree that is the objective, the driver for CCS isn’t there.

So the challenge in the US is to convince legislators that supporting CCS is in their national interest.

Articulating the jobs and investment opportunities and potential business abroad from the expertise gained by being a leader may help. At least until the debate switches back again to solving climate change.